Desai Naranbhai vs Bank Of India

IN THE MATTER OF: Desai Naranbhai ...Appellants Versus Bank of India & Anr. ...Respondents

Present: For Appellant : Mr. Shashwat Singh Advocates. For Respondents : Mr. Karan Valecha and Ms. Khushboo S. Khurana, Advocates for R1. Mr. Vishal Singhal, Advocate for R2/ IRP.

ORDER

(Hybrid Mode)

28.11.2025: Heard counsel for the appellant as well as counsel for the

respondent.

2. This appeal has been filed against the order dated 30.10.2025 by which

order the Adjudicating Authority admitted Section 7 application filed by the

Bank of India. The Bank of India initiated proceedings under Section 7

against the Corporate Debtor alleging total default of Rs. 43,12,25,047/-

along with interest. The submission which has been raised by the counsel for

the appellant is that there was consortium lending in which Bank of India

was one of the lenders and Bank of India could not itself initiated Section 7

application. It is submitted that there was no consent from other members for

filing the Section 7 application.

3. Ld. Counsel for the appellant has relied on Clause-3(b) of the Inter-se

Lender's Agreement to support his submission. Counsel for the respondent

submits that all objections raised by the CD were duly considered by the

Adjudicating Authority and Adjudicating Authority after having found debt

and default has rightly admitted Section 7 application. Adjudicating Authority

has categorically held that the application was filed by the authorised person.

When the appeal was heard on 11.11.202, appellant itself submitted that it is

ready to pursue the consortium members including the Respondent no.1 for

discharge of the debt which was noticed in the order dated 11.11.2025. On

the last occasion it was submitted by the counsel for the parties that proposal

given by the appellant were rejected by the lenders.

4. The submission which is pressed by the appellant is on Clause-3(b)

under which the lenders had agreed to execute in favour of Lender's Agent a

Power of Attorney, as it deemed appropriate for constituting the Lender's

Agent as their lawful Attorney. Clause-3(b) is as follows:-

"3.....

(a)......

(b) The lender's do hereby agree to execute in favour of the Lender's Agent, a power of attorney or other authorisation as may be deemed appropriate for constituting the Lender's Agent, as their true and lawful attorneys for them, in their name and on their behalf to do, execute and perform all acts, deeds and things as the Lender's Agent may deem appropriate necessary or expedient in the given and take credit decisions for and on behalf of the Consortium and communicate the same in the general interest of the UBI

2 of 3 Company Appeal (AT) (Ins) No. 1715 of 2025 Consortium. The Member Bank do hereby agree to ratify and confirm whatever all acts, deeds and things lawfully and bonafide done, taken or effected by the Lead Bank as such attorneys in exercise of the powers, authorises and liberties hereby conferred upon, under and by virtue of this agreement."

The above clause is only for giving Power of Attorney by lenders to an agent,

the said clause cannot take away the right of individual lenders to take legal

proceeding as permissible by law. The said clause is not cloak on the right of

the any lender to take action, hence we do not find any substance in the

above submission of the appellant. The appeal is dismissed.

Interim order stands discharge.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) harleen/RR

3 of 3 Company Appeal (AT) (Ins) No. 1715 of 2025